Knowledge & Technology Management Audit Report: Scientific Instruments, Ambala

THAPAR UNIVERSITY

Knowledge & Technology
Audit Report: Scientific
Instruments, Ambala
Submitted by 1G2

1G2 members:

Bhavya Pabby

Bhupinder Kumar

Ankur Verma

Amit Kalaniya

Abhinav Parmar

Table of Contents
Acknowledgement................................................................................................................................... 3
Need of the project ................................................................................................................................. 4
Conceptual background on the 5 KMPs ................................................................................................... 6
KMPs and Information Management ................................................................................................... 6
KMPs in Human Resource Management .............................................................................................. 7
KMPs in R&D ..................................................................................................................................... 10
KMPs & Strategy................................................................................................................................ 11
KMPs in Intellectual Property Management ....................................................................................... 11
Audit details .......................................................................................................................................... 12
Porter’s 5 force analysis on the scientific instruments industry .............................................................. 13
Bargaining power of customers ......................................................................................................... 14
Bargaining power of suppliers............................................................................................................ 15
Competitive rivalry within the industry............................................................................................... 15
Threat of new entrants ...................................................................................................................... 15
Threat of substitute products ............................................................................................................. 16
Research Methodology.......................................................................................................................... 16
Findings & Conclusion ........................................................................................................................... 17
Limitations of the Study ......................................................................................................................... 18
References ............................................................................................................................................ 19
Appendix……………………………………………………………………………………………………………………………………………….20

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Acknowledgement

At the outset of this report, we would like to thank our guides and professors, Dr. Piyush Verma
& Dr. Harsh Samalia for their direction and support which was a pre requisite to the completion
of this project. We would also like to extend our gratitude to the persons who extended us their
coordination and participated in this knowledge and technology audit. The participation of these
people helped us get a better insight into the functioning of the scientific instruments industry in
Ambala Cantt.

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Need of the project

Knowledge has long ago been recognized as an important asset for sustaining competitive
advantage. Recently, the use of information technologies within an organization has been
identified, by many companies, as an important tool for managing or sharing organizational
knowledge in order to improve business performance.

According to Grant, the knowledge-based view is founded on a set of basic assumptions. First,
knowledge is a vital source for value to be added to business products and services and a key to
gaining strategic competitive advantage. Second, explicit and tacit knowledge vary on their
transferability, which also depends upon the capacity of the recipient to accumulate knowledge.

Third, tacit knowledge rests inside individuals who have a certain learning capacity. The depth of
knowledge required for knowledge creation sometimes needs to be sacrificed to the width of
knowledge that production applications require. Fourth, most knowledge, and especially explicit
knowledge, when developed for a certain application ought to be made available to additional
applications, for reasons of economy of scale.

People can use their competence to create value in two directions: by transferring and converting
knowledge externally or internally to the organization they belong to. When the managers of a
firm direct the efforts of their employees internally, they create tangible goods and intangible
structures such as better processes and new designs for products. When they direct their attention
outwards, in addition to delivery of goods and money they also create intangible structures, such
as customer relationships, brand awareness, reputation and new experiences for the customers.

Effective knowledge management, using more collective and systematic processes, will also
reduce our tendency to ‘repeat the same mistakes’. This is, again, extremely costly and
inefficient. Effective knowledge management, therefore, can dramatically improve quality of
products and/or services.
Better knowing our stakeholder needs, customer needs, employee needs, industry needs, for
example, has an obvious immediate effect on our relationship management.

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So it is very easy to see how effective knowledge management will greatly contribute to
improved excellence, which is to:

a) dramatically reduce costs

b) provide potential to expand and grow

c) increase our value and/or profitability

d) improve our products and services

e) respond faster

The strategies, methods and tools of knowledge management will undoubtedly change, but the
timeless principles will, of course, remain unchanged.

And to survive and succeed in the new global knowledge economy, organizations must become
far more effective and more productive. Organizations must always strive for the best relations
and highest quality.

To do that, the successful organizations and individuals will not allow themselves to keep ‘re-
inventing the wheel’ or ‘repeating the same mistakes. This is so costly that good leaders will
simply not tolerate, nor be able to afford, such cost inefficiencies caused by knowledge gaps and
bad knowledge flows. [1]

Also, technology and innovation are core driving parameters of organizational performance.
Some of the reasons these are becoming important are:

• Technology is changing fast, new products come from new competitors

• Fast changing environment, product lifetimes shorter, need to replace products sooner

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• Products are increasingly difficult to differentiate

• Customers are more sophisticated, segmented and demanding, and expect more in terms
of customization, newness, quality and price

• Customers have more choice

• Apparently separate technologies come together

• Markets forming and changing fast

• With markets and technology changing fast, and good ideas quickly copied, there is
continual pressure to devise new and better products, processes and services faster

Conceptual background on the 5 KMPs

KMPs and Information Management

The information technology infrastructure should provide a seamless "pipeline" for the flow of
explicit knowledge through the 5 stages of the refining process to enable

 capturing knowledge,
 defining, storing, categorizing, indexing and linking digital objects corresponding to
knowledge units,
 searching for ("pulling") and subscribing to ("pushing") relevant content,
 presenting content with sufficient flexibility to render it meaningful and applicable across
multiple contexts of use.

Information technologies such as the World Wide Web and Lotus Notes offer a potentially useful
environment within which to build a multimedia repository for rich, explicit knowledge. Input is
captured by forms for assigning various labels, categories, and indices to each unit of knowledge.
The structure is flexible enough to create knowledge units, indexed and linked using categories

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that reflect the structure of the contextual knowledge and the content of factual knowledge of the
organization, displayed as flexible subsets via dynamically customizable views.

Effective use of information technology to communicate knowledge requires an organization to
share an interpretive context. The more that communicators share similar knowledge,
background and experience, the more effectively knowledge can be communicated via
electronically mediated channels. At one extreme, the dissemination of explicit, factual
knowledge within a stable community having a high degree of shared contextual knowledge can
be accomplished through access to a central electronic repository. However, when interpretive
context is moderately shared, or the knowledge exchanged is less explicit, or the community is
loosely affiliated, then more interactive modes such as electronic mail or discussion databases
are appropriate. When context is not well shared and knowledge is primarily tacit,
communication and narrated experience is best supported with the richest and most interactive
modes such as video conferencing or face-to-face conversation. [2]

KMPs in Human Resource Management

There are several roles that can be played by HR in developing knowledge management system.
First, HR should help the organization articulate the purpose of the knowledge management
system. Investing in a knowledge management initiative without a clear sense of purpose is like
investing in an expensive camera that has far more capabilities than you need to take good
pictures of family and friends. Too often, organizations embrace technologies to solve problems
before they've even identified the problems they are trying to solve. Then, once they realize the
error, they find it difficult to abandon the original solution and difficult to gather the resources
needed to invest in a solution to the real problem. Effectively framing the knowledge
management issue, before deciding on a course of action, is a crucial prerequisite for success.

Second, as a knowledge facilitator, HRM must ensure alignment among an organization's
mission, statement of ethics, and policies: These should all be directed toward creating an
environment of sharing and using knowledge with full understanding of the competitive
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consequences. Furthermore, HRM must nourish a culture that embraces getting the right
information to the right people at the right time.

Third, HRM should also create the "ultimate employee experience." That is, by transforming
tacit knowledge into explicit knowledge through education, organizations must build employee
skills, competencies, and careers, creating "bench strength." This combines the traditional
training and development responsibilities of HRM with the new responsibilities of human capital
steward: using all of the organization's resources to create strategic capability. Disney's new staff
orientation, which emphasizes the firm's mission, values, and history within a context of the
"magic kingdom" experience, is an example of this process of making tacit knowledge more
visible.

Fourth, HRM must integrate effective knowledge sharing and usage into daily life. That is,
knowledge sharing must be expected, recognized, and rewarded. For many individuals and
organizations, this reverses the conventional relationship between knowledge and power. Often,
the common pattern was to hoard knowledge because it made the individual more valuable and
more difficult to replace. Effective knowledge management requires this trend to be overturned
and requires those with information to become teachers and mentors who ensure that others in
the firm know what they know. Teaching must become part of everyone's job. Clearly, for such a
cultural shift to take place, HRM must overhaul selection, appraisal, and compensation practices.
Human resource management has the capabilities for creating, measuring, and reinforcing a
knowledge-sharing expectation.

Fifth, HRM must relax controls and allow (even encourage) behaviors that, in the clockwork
world of industrial efficiency, never would have been tolerated. For example, conversations at
the water cooler were viewed in the past as unproductive uses of employee time—after all,
employees were not at their desks completing specified tasks detailed in their job descriptions. In
the knowledge economy, conversations inside and outside the company are the chief mechanism
for making change and renewal an ongoing part of the company's culture.

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As another example, consider individuals in organizations described as "gossips," who would
rather talk than work. Frederick Taylor's industrial engineers would have eliminated these
gossips from workplaces in the early twentieth century, since they did nothing that was
perceptibly valuable. However, in the knowledge economy, if the conversations are relevant to
the firm's strategic intent, these same people may be described as "knowledge brokers": those
individuals who like to move around the company to hear what is going on, sparking new
knowledge creation by carrying ideas between groups of people who do not communicate
directly. If the topics serve organizational needs, these individuals play a role similar to bees that
cross-pollinate flowers and sustain a larger ecosystem.

Organizations should selectively recognize and reward, rather than universally discourage and
punish, these types of behaviors. Clearly, not all conversation is productive and constructive.
Human resource management still must play a role in discouraging gossip that undermines,
rather than promotes, a learning community. Human resource management will need to adjust
both its own perspective (from rule-enforcer) as well as that of managers and others who hold
outdated notions of what is "real work."

Sixth, HRM must take a strategic approach to helping firms manage email, instant messenger,
internet surfing, and similar uses of technology. Clearly, the Internet has a role in generating and
disseminating knowledge, and therefore is an integral part of knowledge management. A related
issue is HRM's role in helping firms manage the distancing consequences of electronic
communication. As employees increasingly rely on technology to communicate, they lose
opportunities to develop the rich, multifaceted relationships that encourage the communication of
tacit knowledge. Human resource management can contribute to developing social capital by
sensitizing employees to the negative consequences of excessive reliance on electronic media
and by creating opportunities for face-to-face contact.

Seventh, HRM must champion the low-tech solutions to knowledge management. Although it
should not ignore the high-tech knowledge management tools, HRM contains the expertise to
develop low-tech knowledge management strategies. For example, when the team that developed
the Dust buster vacuum tool was created, they were given a "war room" in which they could

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spread out their materials and leave sketches, models, notes, and so on plastered on walls and
throughout the workspace. These visible outputs of their thinking processes helped create a
shared context for their efforts and turned the room into a truly collaborative workspace.

Some Asian firms, such as Dai-Ichi, create special rooms (with green tea and comfortable places
to sit), where researchers are expected to spend a half-hour daily, telling whomever they meet
about their current work. [3]

KMPs in R&D

Although many of the underlying assumptions of KM are not new, the formal study and
application of KM in R&D organizations is a relatively young discipline. The goal of the study
was threefold:

 Identify a model for knowledge flow in the R&D process that could be a visual point of
contact for discussions around the key issues R&D managers face and the ways to
manage knowledge flow.
 Highlight aspects of KM that are unique or especially important to the process of R&D.
 Catalog "better practices" that R&D managers use to facilitate knowledge flow and the
knowledge creation process.

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KMPs & Strategy

Strategic plans are developed and deployed to close the gap between what a firm can do and
must do to be competitive. Knowledge strategies are devised to close the gap between what a
firm knows and what a firm must know to be competitive. A knowledge strategy defines the
actions necessary to ensure the organisation’s knowledge assets meet organisational objectives
and support its strategies. In line with competitive strategies, knowledge strategies provide goals,
a unified vision, a base for decision-making, a communication tool, and a foundation for
consistent operations. A knowledge strategy includes actions or options to:

• determine which knowledge assets are required;
• acquire or develop new knowledge assets;
• make major changes to existing knowledge assets;
• maintain the existing knowledge assets;
• make the knowledge available; and,
• dispose of redundant knowledge assets

KMPs in Intellectual Property Management

Intellectual property rights as a collective term includes the following independent IP rights
which can be collectively used for protecting different aspects of an inventive work for multiple
protection:-

 Patents
 Copyrights
 Trademarks
 Registered ( industrial) design
 Protection of IC layout design
 Geographical indications

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 Protection of undisclosed information

Intellectual property is an aspect of property rights which augments the importance of know how
assets. Knowledge assets are often inherently difficult to copy; moreover, like physical assets,
some knowledge assets enjoy protection against theft under the Intellectual property laws of
Individual nation states. In advanced nations, these laws typically embrace patents, trademarks,
trade secrets and copyright. There are many other dimensions along which knowledge could be
defined or along which innovations could be classifieds. However, the only other key dimensions
to be identified here is whether or not the knowledge in question enjoys protection under the
intellectual property laws. Patents, trade secrets, trademarks provide protection for different
mediums in different ways. The strongest form of intellectual property is patent. A valid patent
provides rights for exclusive use by the owner, although depending on the scope of the patent it
may be possible to invent around it, albeit at some cost.
The growth of IT has also amplified the importance of intellectual property and has injected
intellectual property into new contexts. E.g. it is not uncommon to discover the foundations of
corporate success for wholesalers and retailers buried in copyrighted software and in information
technology supporting order entry and logistics.

Audit details
Industry assigned: Scientific Instruments

Region: Ambala Cantt

Organizations that participated in audit:

 Labomed Microscopes
 Shiv Dial Sud & Sons
 Kanwaljit Scientific instruments
 Quality scientific & mechanical works
 International Biological Laboratories

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Porter’s 5 force analysis on the scientific instruments industry

Porter's five forces analysis is a framework for industry analysis and business strategy
development formed by Michael E. Porter of Harvard Business School in 1979. It draws
upon industrial organization (IO) economics to derive five forces that determine the competitive
intensity and therefore attractiveness of a market. Attractiveness in this context refers to the
overall industry profitability. An "unattractive" industry is one in which the combination of these
five forces acts to drive down overall profitability. A very unattractive industry would be one
approaching "pure competition", in which available profits for all firms are driven to normal
profit.

Three of Porter's five forces refer to competition from external sources. The remainders are
internal threats.

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Porter referred to these forces as the micro environment, to contrast it with the more general
term macro environment. They consist of those forces close to a company that affect its ability to
serve its customers and make a profit. A change in any of the forces normally, requires a
business unit to re-assess the marketplace given the overall change in industry information. The
overall industry attractiveness does not imply that every firm in the industry will return the same
profitability. Firms are able to apply their core competencies, business model or network to
achieve a profit above the industry average.

Porter's five forces include - three forces from 'horizontal' competition: threat of substitute
products, the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.

Bargaining power of customers

There are 2 types of customer segments that the scientific industry segment in Ambala serves:
one, the domestic segment and the other, is the export market. For the export market,
manufacturers of scientific instruments sell their goods through traders who get export orders
from mainly US and Europe. Since, threat of backward integration is low from the trader’s side
as they require substantial working capital and expertise to do so, manufacturers concentrate
most of their business on these segments (export) whenever they can as they can dominate.

The domestic market, on the other hand is relatively fuller and more competitive as consumers
transact in domestic currency and have more options to choose from (102+ firms). This does not
leave the manufacturers with much scope for profit in the domestic segment as compared to the
export segment.

So in the export market the bargaining power of customers is relatively lower than the domestic
segment.

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Bargaining power of suppliers

Suppliers of raw material for manufacturing instruments include ceramic, plastics and mild steel
manufacturers. These suppliers typically are large scale manufacturers that serve whole clusters
of scientific instruments industry located elsewhere in India. Also, apart from certain grades of
these materials they also manufacture other grades of steel, plastic and ceramic that are used for
surgical instruments industry. Due to this scale of operations, suppliers have a better say on the
prices of raw materials they deliver and such SME’s are not wholly needed for their operations
as well. It makes little difference to the supplier whether he gains or loses one or two SMEs.

Hence, bargaining power of suppliers is high.

Competitive rivalry within the industry

Because of the presence of a large number of firms within the industry and that too in a small
region (102+ in Ambala Cantt), the industry approaches perfect competition. Players cannot vary
prices too much, even though prices alone are not the ultimate determinant. A certain portion of
players compete exclusively on prices, while a major portion compete on quality, but only within
a certain price range.

Thus competitive rivalry is high.

Threat of new entrants

Since competitive rivalry is high, margins are moderate but squeezing, domestic buyers are on a
certain advantage and suppliers have the upper hand in deciding prices i.e. overall the degree of
forces is high, hence this is a relatively unattractive industry for new players (reduced profits).
The last entrants to enter were around mid 1990s and since then few have ventured here.

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Thus, threat of new entrants is low.

Threat of substitute products

As such, there is no real threat of substitute products within the industry.

Research Methodology

Interview method was used to process the obtained information from the specialist personnel
(expert’s opinion).

To attain the objectives of this project, Questionnaire of KM in relation to five different
parameters was provided. Five parameters are:

KM and Information Management: This section consists of 7 questions. In this section how
companies manage to disseminate information within and outside their industry would be
measured.

KM and HRM: This section consists of 7 questions. In this section how companies manage to
disseminate information and uses the same for making their HR practices better would be
measured.

KM and Management Practices in R&D: This section consists of 16 questions. In this section
how companies utilize KM in making their R& D practices effective and competitive would be
measured.

KM and Strategy: This section consists of 7 questions. In this section how companies manage to
align business strategy with their knowledge goals would be measured.

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KM and IPR: This section consists of 7 questions. In this section how companies protect their
knowledge using patents and other means is measured.

Managers would respond on a five point Likert scale on two dimensions Satisfaction and &
Importance. The basic idea here is to understand if the managers understand the importance of
KM in relation to other parameters and they implemented successfully or not.

After collecting the data, statistical techniques could be applied. In the present project,
Correlation would be used. In each parameter, the correlation between satisfaction and
Importance would be calculated.

Findings & Conclusion

Correlation between Importance and Satisfaction
Shiv Dial
Labomed Quality Scientific & Sud & Kanwaljit International
Microscopes Mechanical Works Sons Sc. Instr. Biological Lab
Info. Mgmt 0.915577 0.643524 0.676557 0.804701 0.690137636
Human
Resource
Mgmt 0.67198 1 1 0.88497 0.974631846
R&D 0.734643 0.960526 0.895331 0.520165 0.942758076
Strategy 0.975237 0.95656 0.948683 0.975237 0.487995425
Intellectual
Property
Mgmt Na -0.10607 na na na

 R & D and HRM are two areas where most firms concentrated the most. There was
generally a high correlation between what firms deemed satisfactory and important. This
indicates that whatever these firms did in those areas which yielded them satisfactory
results, they considered important. They viewed little or no scope for improvement in that
area.

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 Strategy was one area which had a very high correlation throughout. This indicates that
an organization was following only those practices that were inherently close to their
strategic positioning in the industry. Whatever these companies held satisfactory to their
performance was held extremely important.
 Use of information management was slight to moderate and companies were satisfied
with the existing level of usage.
 Intellectual property was one field where very little had been done or explored. Only one
firm (Quality Scientific & Mechanical Works) had applied for a patent (malarial parasite
detection microscope through capillary method-fluoroscent microscope). But rest of the
firms were open to the idea of pursuing patent filing and intellectual property if they
came across the opportunity.

Limitations of the Study

Since it is a pilot survey and data is collected as part of purposive and convenience sampling,
generalization of the same cannot be made. Nonetheless this study can be helpful in making the
base for making certain improvements for further research.

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References

http://web.cba.neu.edu/~mzack/articles/kmarch/kmarch.htm [1]

http://www.allbusiness.com/technology/computer-software/795585-1.html#ixzz1kmKqtpww [2]

http://www.explorehr.org/articles/HR_Planning/The_Role_of_HRM_in_Knowledge_Management.html
[3]

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Appendix

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Knowledge & Technology Management Audit Report: Scientific Instruments, Ambala

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